WA businesses plead for corporate tax cut lifeline

EXCLUSIVE, Shane Wright, Economics EditorThe West Australian

Monday, 13 August 2018 7:47AM

Camera IconPrime Minister Malcolm Turnbull is under pressure to dump the $35 billion company tax cuts.

WA small and medium-sized businesses have made a last ditch plea to the Federal Government to drive through its company tax cuts, saying they are even more important to their survival than a stronger economy.

Ahead of the Government’s last stand on its signature 2016 policy, the WA Chamber of Commerce and Industry has released polling showing strong support among local businesses for the company tax rate for all firms to be cut to 25 per cent.

The survey shows almost 60 per cent of businesses reckon a company tax cut would directly benefit the WA economy.

One of those businesses is metal fabricator Unique Metal Works which is facing tough competition from smaller firms that are enjoying a tax cut and firms overseas where the corporate rate is lower than that in Australia.

Managing director Paul Figliomeni said conditions were tough in WA because of a slowdown in the construction sector that was forcing many businesses to the wall.

He said a tax cut for his business, which employs 70 people, would provide an important boost and underpin its future.

“A tax cut means we can invest in new and better equipment, grow the business and ultimately put on more staff,” Mr Figliomeni said.

“We’re competing against smaller firms that are already getting the lower rate. And we’re also up against overseas firms that have much lower tax rates.”

Prime Minister Malcolm Turnbull is under pressure to dump the $35 billion company tax cuts in the wake of the “super Saturday” by-elections where Labor campaigned hard against them.

Ditching the cuts, which would cut the tax rate to firms with a turnover of more than $50 million a year to 25 per cent over the next decade, would free-up cash that could be used to bring forward tax relief for small firms or increase tax cuts to ordinary workers.

A vote on the cuts is expected in the Senate this week.

The Chamber of Commerce survey showed the tax cut was considered the single biggest issue ahead of next year’s Federal election, more important than the state of the economy.

It also found 71 per cent of local firms believed a tax cut would help larger firms invest more local small and medium sized firms.